Smt. Shama Parveen, Meerut V. ITO, Meerut

ITA 3964/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96940 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 08-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: V K GOEL
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Opportunity of being heard; Principle of natural justice; Valuation report
• Section: 50C; 142(1)

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3960 /DEL/201 4 ASSESSMENT YEAR 200 9 - 10 SH. TUFAIL AHMED, VS. ITO, WARD 2(4), MEERUT C/O VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES, MEERUT [ PAN : ADDPA8373N) ITA NO. 3964 /DEL/201 4 ASSESSMENT YEAR 200 9 - 10 SMT. SHAMA PARVEEN, VS. ITO, WARD 2(4), MEERUT C/O VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES, MEERUT [ PAN : AHEPP0184B) DATE OF HEARING : 08 .0 7 .2015 D ATE OF PRONOUNCEMENT : 07 .08 .2015 APPELLANT BY : SHRI V.K. GOEL, ADV. RESPONDENT BY : SHRI ROBIN RAWAL, SR. DR ORDER TH ESE APPEAL S HAVE BEEN FILED BY THE DIFFERENT ASSESSEE S AGAINST THE SEPARATE ORDERS PASSED BY THE LD. CIT(A) PERTAINING TO RELEVANT ASSESSMENT YEAR 2009 - 10. SINCE THE ISSUES INVOLVED IN BOTH THE APPEALS ARE COMMON AND IDENTICAL, HENCE, WE ARE DISPOSING OF THE SAME BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH ITA NO. 396 4 /DEL/2014 (AY 2009 - 10). 2 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO. 3960/DEL/2014 (AY 2009 - 10): - 1. THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT PROVIDING AN OPPORTUNITY BEING HEARD AFTER WRITTEN SUBMISSION FILED BY THE ASSESSEE. HENCE ORDER PASSED BY CIT(A) IS AGAINST T HE PRINCIPLE OF NATURAL JUSTICE. 2. THAT WITHOUT PREJUDICE TO GROUND NO.1, LD. AO AS WELL AS CIT(A) IS IN ERROR IN MAKING ADDITION U/S. 50C ON THE BASIS OF VALUATION GIVEN BY THE DVO BY IGNORING GOVERNMENT APPROVED VALUER. HOWEVER, THE ASSESSEE POINTED O UT SO MANY DEFECT IN THE DVO REPORT. THEREFORE, ADDITION OF RS. 2,97,500/ - IS UNJUSTIFIED AND LIABLE TO BE DELETED. 3. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 3. THE FOLLOWING GROUNDS HAVE BEEN RA ISED IN ITA NO. 3964/DEL/2014 (AY 2009 - 10): - 1. THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT PROVIDING AN OPPORTUNITY BEING HEARD AFTER WRITTEN SUBMISSION FILED BY THE ASSESSEE. HENCE ORDER PASSED BY CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2. THAT WITHOUT PREJUDICE TO GROUND NO.1, LD. AO AS WELL AS CIT(A) IS IN ERROR IN MAKING ADDITION U/S. 50C ON THE BASIS OF VALUATION GIVEN BY THE DVO BY IGNORING GOVERNMENT APPROVED VALUER. HOWEVER, THE 3 ASSESSEE POINTED OUT SO MANY DEFECT IN THE DVO REPORT. THEREFORE, ADDITION OF RS. 2,97,500/ - IS UNJUSTIFIED AND LIABLE TO BE DELETED. 3. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED, THEREFOR E, THE SAME ARE NOT REPEATED HER FOR THE SAKE OF CONVENIENCE. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE STATED THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD AFTER WRITTEN SUBMISSIONS FILED BY THE ASSE SSEE. HENCE, ORDER PASSED BY THE LD. CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. HE ALSO FILED THE PAPER BOOK BEFORE ME CONTAINING PAGES A - D AND 1 TO 53 HAVING THE WRITTEN SUBMISSIONS, PHOTOCOPY OF RETURN RECEIPT, COMPUTATION OF INCOME AND VAL UATION REPORT BY THE GOVT. APPROVED VALUER; PHOTOCOPY OF REPORT OF DEPARTMENTAL VALUATION OFFICER DATED 23.2.2011; PHOTOCOPY OF ORDER U/S. 143(3); PHOTOCOPY OF SUPREME COURT ORDER IN THE CASE OF CIT VS. GODAVARI CORPORATION (200 ITR 567); PHOTOCOPY OF SUPR EME COURT ORDER IN THE CASE OF KP VERGHESE VS. ITO (131 ITR 597); PHOTOCOPY OF PUNJAB AND HARYANA HIGH COURT ORDER IN THE CASE OF PREM NARAIN AND CO. VS. CIT (161 TAXMANN 361); PHOTOCOPY OF SUPREME COURT ORDER IN THE CASE OF CIT VS. SHIVAKAMI CO. (P) LTD. (159 ITR 71); PHOTOCOPY OF MUMBAI ITAT ORDER IN THE CASE OF SURESH C MEHTA VS. ITO, W ARD 13(2)(1), MUMBAI (144 ITD 427); PHOTOCOPY OF DELHI ITAT ORDER IN THE CASE OF SH. PADAM KUMAR MITTAL VS. ITO, KHATAULI, ITA NO. 6159/DEL/2012. FOR THE SAKE OF CONVENIEN CE, WE ARE REPRODUCING THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AS UNDER: - FACTS OF THE CASE: 4 THAT THE ASSESSEE HAS FILED INCOME - TAX RETURN FOR THE A.Y. 2009 - 10 06 - 01 - 2010 DECLARING TOTAL INCOME OF RS. 1,76,050/ - , WHICH WAS PROCESSED ON SAME INCOM E. LATER ON, THE CASE SELECTED FOR SCRUTINY THROUGH CASS AND REASON FOR SECTION SALE OF PROPERTY OF RS. 40,55,000/ - IN THE JOINT NAME OF THE ASSESSEE HERSELF ALONG WITH HER HUSBAND SH. TUFAIL AHMED DURING THE ASSESSMENT PROCEEDING THE ASSESSEE FILED SALE D EED AND PURCHASE DEED OF THE PROPERTY SOLD OUT AND HAS DECLARED SHORT TERM CAPITAL GAIN OF RS. 75,000/ - IN RESPECT OF 50% HER SHARE IN THE SALE CONSIDERATION OF THE PROPERTY. THE PROPERTY UNDER CONSIDERATION IS A RESIDENTIAL HOUSE WHICH WAS SOLD OUT FOR RS . 40,55,000/ - AND STAMP DUTY WAS PAID ON RS. 49,20,000/ - THEREFORE, SECTION 50C IS ATTACHED. HOWEVER, THE VALUATION REPORT FILED BY THE ASSESSEE PREPARED BY A GOVERNMENT APPROVED VALUER WAS RS. 39,90,000/ - . LD. A.O. REFERRED THE VALUATION OF THE PROPERTY T O THE DEPARTMENTAL VALUATION OFFICER WHO VALUED THE SAID PROPERTY AT RS. 46,50,000/ - VIDE VALUATION REPORT AS ON 23 - 02 - 2011, A NOTICE U/S 142(1) DATED 08 - 08 - 2011 WAS ISSUED TO SHOW CAUSE WHY THE CAPITAL GAIN ON THE SALE OF THE PROPERTY MAY NOT BE COMPUTED BY ADOPTING HER 50% SHARE IN THE SAID PROPERTY AMOUNTING TO RS. 23,25,000/ - AS DETERMINE BY THE DEPARTMENTAL VALUATION OFFICER AS PER PROVISION OF SECTION 50C OF I.T. ACT. THEREAFTER THE ASSESSMENT WAS COMPLETED AND VALUE OF DETERMINE BY THE DVO WAS TAKEN AS FULL VALUE OF CONSIDERATION AS UNDER: SALE VALUE AS PER VALUATION REPORT OF THE D.V.O. RS. 46,50,009/ - ASSESSEE'S SHARE 50% RS. 23,25,000/ - 5 LESS: PURCHASE VALUE RS. 34,05,000/ - ASSESSEE'S SHARE 50% RS. 17,02,500/ - LESS: COST OF CONSTRUCTION/REPAIR & RENOVATION RS. 2,50,000/ - NET SHORT TERM CAPITAL GAIN RS. 3,72,500/ - CAPITAL GAIN DECLARED BY ASSESSEE RS. 75,000/ - ADDITION UNDER THE HEAD CAPITAL GAIN RS. 2,97,500/ - CONSIDERING ALL THE FACTS AND EVID ENCES TAKING INTO CONSIDERATION AND AN VIEW OF THE ABOVE DISCUSSION ASSESSMENT IS COMPLETED AND INCOME IS COMPUTED AS UNDER: - INCOME RETURNED RS. 1,76,050/ - ADDITION UNDER SHORT TERM CAPITAL GAIN (AS DISCUSSED ABOVE) RS. 2,97,500/ - TO TAL ASSESSABLE INCOME RS. 4,73,550/ - THAT THE ASSESSEE HAS NOT ACCEPT THE ORDER PASSED BY LD. A.O. AND FILED AN APPEAL BEFORE CIT(A), MEERUT AND CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL BEFORE YOUR HONOUR BY TAKING F OLLOWING GROUNDS OF APPEAL: GROUNDS OF APPEAL 1. THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT PROVIDING AN OPPORTUNITY BEING HEARD AFTER WRITTEN SUBMISSION FILED BY THE ASSESSEE. HENCE ORDER PASSED BY CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 6 2. THAT WITHOUT PREJUDICE TO GROUND NO. 1, LD. A.O. AS WELL AS CIT(A) IS IN ERROR IN MAKING ADDITION U/S 50C ON THE BASIS OF VALUATION GIVEN BY D.V.O. BY IGNORING GOVERNMENT APPROVED VALUER. HOWEVER, THE ASSESSEE POINTED OUT SO MANY DEFECT IN THE D.V.O. RE PORT. THEREFORE, ADDITION OF RS. 2,97,500/ - IS UNJUSTIFIED AND LIABLE TO BE DELETED. 3. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. A.O. OBSERVATION: THAT THE REPLY OF THE COUNSEL OF ASSESSEE HAS BEEN C ONSIDERED BUT THAT IS NOT ACCEPTABLE AS THERE IS NO BINDING ON THE A.O. TO DO SO. I, THEREFORE, ADOPT THE VALUE OF PROPERTY AS DETERMINED BY THE DEPARTMENTAL VALUER AT RS. 46,50,000/ - IN WHICH ASSESSEE'S SHARE IS 50% I.E. RS. 23,25,000/ - . THE ASSESSEE HAS CLAIMED AMOUNTING RS. 2,50,0001 - AS COST OF CONSTRUCTION / RENOVATION AND REPAIR IN THE RESIDENTIAL PROPERTY IN SUPPORT OF WHICH HE HAS FILED COPY OF BALANCE SHEET FOR THE A.Y. 2007 - 08 AND PHOTOCOPY OF CONTRACT MADE FROM THE PERSONS WHO HAD DONE THE JOB OF RENOVATION AND REPAIR IN THE BUILDING AFTER THE PURCHASE OF RESIDENTIAL HOUSE IN F.Y. 2006 - 07. NO ADVERSE INFERENCE IS DRAWN. ASSESSEE'S SUBMISSION: THE ASSESSEE POINTED OUT VARIOUS DEFECT BEFORE A.O. AS WELL AS CIT(A) THE OBJECTION ARE AS UNDER: (I) IT IS RESPECTFULLY SUBMITTED THAT THE SUBJECT PROPERTY IS SITUATED NEAR THE GANDA NAALA AND THEREFORE THERE MUST BE 7 A DECREASES IN THE VALUATION DUE TO ITS VICINIT Y TO THE GANDA NAALA. THIS IMPORTANT FACT HAS NOT BEEN CONSIDERED BY THE D VO IN HIS VALUATIO N REPORT DATED 23.12.2011. (II) THE VALUER APPOINTED BY THE APPELLANT IS AN APPROVED VALUER BY THE INCOME TAX DEPARTMENT. THE DIFFERENCE IN VALUATION OF THE D VO AND THE APPELLANT'S APPOINTED VALUER IS UNEXPLAINED. (III) THE LIFE OF THE BUILDING CLAIME D BY THE D VO WAS INITIALLY CLAIMED TO BE 65 YEARS BUT LATER ON IT WAS CHANGED TO 80 YEARS. THE D VO HAS NOT GIVEN ANY BASIS FOR CHANGING THE LIFE OF THE SAME. (IV) FURTHER, IT IS IMPORTANT TO NOTE THAT THE DVO HAS HIMSELF GIVEN A FINDING OF HIS VALUATION REPORT WHICH STATES AS FOLLOWS: THE PROPER TY WAS INSPECTED BY THE UNDERSIGNED ON 5 .12.2011 ALONG WITH JE (VALUATION). THE REAR PORTION OF THE BUILDING AND INTERIORS WERE NOT THOROUGHLY EXAMINED DUE TO THE OBJECTIONS OF THE PRESENT OCCUPANT. THE OBSERVATI ON OF CIT(A) IS MERELY REFUSING AND NOT INTERFERING THE DVO FINDING HOWEVER, THE AO AS WELL AS D VO HAS NOT GIVEN ANY OPPORTUNITY TO COMFORT THE OBJECTION MADE BY THE ASSESSEE THEREFORE, ORDER PASSED BY A.O. AS WELL AS CIT(A) IS AGAINST THE FACTS AND LAW. THE A.O. AS WELL AS CIT(A) HAS NOT CONSIDERED THE CASE LAWS QUOTED BY THE ASSESSEE THE ASSESSEE REPLY UPON I TAT JUDGMENT IN THE CASE OF PADAM KUMAR MITTAL VS. INCOME - TAX OFFICER, KHATALI ITA NO. 6159/0ELL2012 IN WHICH, HON'BLE BENCH HELD AS UNDER: 8 IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE AFORESAID OBJECTION IS VERY MUCH NECESSARY IN ORDER TO GIVE PROPER JUSTICE TO THE ASSESSEE. HENCE, IN OUR CONSIDERED OPINION, THE ISSUE IN DISPUTE REQUIRES RECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFI CER, THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO REFER THE MATTER TO THE DVO TO DECIDE THE AFORESAID OBJECTIONS AS MENTIONED IN HINDI LANGUAGE AND THEREAFTER THE A.O. MAY DECIDE THE SAME AFTER HEARING THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. PRAYER : - CONSIDERING THE FACTS OF THE CASE AND CASE LAW QUOTED BY THE ASSESSEE YOUR HONOUR IS REQUESTED TO KINDLY ALLOW THE APPEAL AND OBLIGE. 5. LD. DR RELIED UPON THE ORDERS PASSED BY THE REVENUE AUTHORITIES . 6 . I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. I FIND CONSIDERABLE FORCE IN THE ASSESSEE S COUNSEL THAT LD. CIT(A) HAS PASSED THE ORDER WITHOUT PROVIDING AN OPPORTUNITY BEING HEARD AFTER WRITTEN SUBMISSION FI LED BY THE ASSESSEE. HENCE, HE SUBMITTED THAT ORDER PASSED BY THE CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. I FURTHER FIND CONSIDERABLE COGENCY IN THE ASSESSEE S SUBMISSIONS IN WHICH HE HAS STATED THAT THE AO AS WELL AS CIT(A) HAS NOT CONSIDER ED THE CASE LAWS QUOTED BY THE ASSESSEE RELY UPON ITAT JUDGMENT IN THE CASE OF PADAM KUMAR MITTAL VS. ITO, KHATALI ITA NO. 6159/DEL/2012 IN WHICH, THE TRIBUNAL HAS HELD AS UNDER: - IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT THE AFORESAID OBJECTION IS VERY MUCH NECESSARY IN ORDER TO GIVE PROPER 9 JUSTICE TO THE ASSESSEE. HENCE, IN OUR CONSIDERED OPINION, THE ISSUE IN DISPUTE REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. THEREFORE, THE AO IS DIRECTED TO REFER THE MATTER TO THE DVO TO DECIDE THE AFORE SAID OBJECTIONS AS MENTIONED IN HINDI LANGUAGE AND THEREAFTER THE AO MAY DECIDE THE SAME AFTER HEARING THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW. 7. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE PRECEDENT AS AFORESAID , CITED BY THE LD. COUNSEL OF THE ASSESSEE IN THE WRITTEN SUBMISSIONS AND IN THE INTEREST OF JUSTICE, I AM OF THE CONSIDERED VIEW THAT THE MATTER NEEDS TO BE RE - ADJUDICATED BY THE AO, AFTER CONSIDERING THE OBJECTIONS RAISED IN THE WRITTEN SUBMI SSIONS AS AFORESAID FILED BEFORE THE AO , LD. CIT(A) AND BEFORE ME. ACCORDINGLY, I REMIT THE ISSUES IN DISPUTE TO THE FILE OF THE AO WITH THE DIRECTIONS TO CONSIDER THE SAME, AFRESH, UNDER THE LAW. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUAT E O PPORTUNITY OF BEING HEARD. 8 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 8 /201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 07 / 8 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES